The Troika (European Union, European Central Bank, and IMF) is now demanding that Greece’s Pasok government cut the national minimum wage of private sector workers!
The meagre 760 euros (£660) per month that a private sector worker receives is considered too high, and the Troika suggests that it is reduced to 560 euros per month, in line with Portugal’s minimum wage.
The Troika’s argument is predictable: “Reduce the minimum wage further and it will encourage capital investments. Increase the flexibility of working conditions, and that will encourage businessmen to hire workers, and make the Greek economy more competitive in the world market”.
The Pasok government has not agreed to openly break the national agreements. However, it has agreed to cut employers’ insurance contributions by 10%. The expansion of part time employment (two days, three days, four days) instead of full time employment has effectively already cut the minimum wage.
A law has been passed that permits businesses that employ less than 50 people to override the national agreements and pay reduced wages provided that three-fifths of their employed workforce agree.
Further cuts in the minimum wage will throw a bigger number of workers below the poverty line and further sink the whole of the Greek economy into a vicious circle of reduced wages, reduced consumer power, market stagnation, increased unemployment, increased dependency on state benefits, and economic shrinkage.
The Troika representatives have also insisted on other additional measures to collect a further 6 billion euros during the years 2013 and 2014. Even traditional allies of capital are to be attacked, with government plans to reduce the wages and benefits of judges, military officials, university professors, priests, directors, etc.
The Troika insists that the government should speed up the implementation of the measures already voted through, or about to be voted on. It threatens that it will install their own supervisors and auditors to make sure the austerity budget and measures are implemented.
The previous week’s measures had already included suspending 30,000 public sector workers on 60% of their wages and pushing the majority of them into unemployment; big cuts in public sector wages; further reductions on pensions and benefits; tax increases; an upcoming 19% increase on utility bills. Unemployment is already 20%, and expected to go even higher on 2012.
Seven out of 10 Greek families are expected to cut basic necessities from their budget.
In the meantime, German Chancellor Angela Merkel and French president Nicolas Sarkozy are holding talks without the participation or even consultation of the Greek government. Merkel is proposing the further “restructuring” and “cutting down” of the Greek debt by up to 50%-60%.
Such a partial write off of the Greek debt would go with a series of even more aggressive austerity measures, under external supervision, and violation of the sovereignty of the Greek state for decades to come. The “relief” would not come at the expense of bondholders and bankers, but of the majority of Greek society.
So far the austerity measures have brought: negative growth (minus 5%), unemployment at 20%, and an expansion of the debt:GDP ratio to 160% within two years.
The speeding up and expansion of the same policies will lead us to an abyss.